Case Study: To Pay or Not to Pay: Zagat’s Dilemma

  1. Evaluate Zagat using the competitive forces and value chain models.

The Zagat publishes restaurant guides that are based on customer reviews. The Zagat initially was publishers of books and soon became bestseller of their products. The customers found it easy to access the books and guides through website but the company urged customers to spend money on the purchase and access.

  • The Zagat publishing had competitors when they published books. When they came online the Yelp was the strongest competitors providing free service as substitute to the Zagat online world.
  • The online portal was not optimized to serve the needs of the customers and visitors. The collection of customer reviews was not available on the portal.
  • Speaking of value chain analysis, Yelp collet data from around thousands of customers while Zagat collected data from hundreds of customers and lagged behind in latest trends and new arrivals.
  • The search engine of the Zagat was also not competitive because the search bots cannot move under the pay wall.
  1. Compare Zagat’s and Yelp’s e-commerce business models. How have those models affected each company’s Web strategy?

The Zagat online transaction system is membership based allowing the authorized customers to make reviews. This limits the possibility of new reviews and customers willing to share their experiences and ideas on the website that can help develop the guide for the food lovers.

Yelp uses the online transaction model where anyone can access the information and leave information with entries and modifications.

The Zagat provides the commenting and reviews to selected customers whose reviews are then added into the guide book. The quality of the entries in Zagat are quality wise effective and attractive. The Zagat articles are included in the books and are well formed. The content on the website can be viewed by users after they pay for it that is more professionally researched and developed.

The Yelp articles are les professionally researched and formed where all users can add and edit information they provide. The buyers and sellers visit the site to give their reviews that are not necessarily always professional. They are free to write entire essays on the site and these essays are viewed by all.

  1. Why was Zagat’s content will suited for the Web and for the mobile digital platform?

The content at Zagat is professionally developed and is genuine which means the panel customers who give out reviews are professionals. These reviews are best suitable for the mobile digital format or the website format platform since

  • The content is organized with respect to cities, top restaurants and certain type of cuisine.
  • The content that are precise and professionally written are streamed on the web
  • There is more quality and weight in the content when it is written professionally by reviews free form jumbles and personal ideas
  • The restaurants details are given initially to describe the place. If the users like the place they can further scroll down and view more information.
  1. Do you think Zagat’s decision to use a pay wall for its Web site was a mistake? Why or why not?

The strategy to keep the content within the pay wall was a mistake that caused Zagat a near fall out of the online market. The users on the internet have been given so many alternatives that is easy for them to switch to some other site even a smaller one to get what they are looking for. The customers look for primarily a free consent and if they are forced to get through a pay wall they are distracted and search for the free resources. The Google is the main search engine that is used by the users when they are looking for information which means when they look for information they surely provide the tag of “free” that drops the Zagat out of list. Moreover, the content developed by the customers and reviewers is viewed on the Zagat website hence paying for such content that is shared on the website by customers willingly does not make any sense.

  1. Will Zagat’s acquisition by Google make it more competitive? Explain your answer.

The acquisition of the Zagat by Google with benefits the both parties. The following reasons are provided to support the given statement

  • The content generated at the Zagat best matches the requirements of the Google Places.
  • The acquisition has facilitated that the content that awas previously not accessible will not be through the Google Place and usrely will ttarct more cutomers and users
  • The Zagat book review collection keep generating reviews form book selling that will profit Google
  • The customer generated reviews are very useful of the partners since these review can be used to exploit the review collection market about restaurants, places and locations

The acquisition is   benefit for both companies since it will uplift Google internet market and will provide prominence to Zagat under the dominance of Google.